1

CHAPTER 1

Marketing Aspect

Marketing is the process of perceiving, understanding, stimulating, and satisfying

the customer needs, wants and expectations through the goods and services of

specially selected target market which is better that the competitors. The process of the

business is to build strong customer relationship in order to gain loyalty from them.

This chapter discusses the Service Description, Target Market, Demand and

Supply Analysis, Competitor Analysis, Pricing Structure, Projected Sales, Marketing

Strategies and the Selling Expenses.

The proponent of this business must have the desired creativity and originality so

as to be able to provide good quality service to the customers. The fulfilment of the

demands of its clients is the key objective of the recommended business.

Service Description

Nowadays, we Filipinos prefer to be more practical to our daily necessities and

expenses. Since this era became a generation wherein new trends of fashion styles are

in, people also want to be in line with the trend. No matter where you are, there will

always be a demand for a barbershop for the simple reason that the hair will not stop

growing. The hair is your crowning glory, so to speak. Kingsmen Cuts & Shave offers

the newest accommodating haircut service. For those men who need a complete line of

pampering. It is a great opportunity for us to give you a satisfying haircut with some

little extras like a massage or a quick trim around ears without paying any add-on fees.

People might think that a barbershop business concept might be the most
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unconventional business structure that we can actually be inspired with, but most

barbershops credit its success in business by keeping it unique and simple.

The main aim of this study is to deliver best quality and premium services at

comfortable prices. The researchers are very aware that this kind of business is trend in

the growing industry of wellness and styles. But, with the growing population of students

in the universities and colleges, there would always be a place for new ones. What

makes our business proposal unique is that simplicity is our ultimate sophistication. It

relives the good old days with a nice piped-in retro music and barbers who can be

friend, confidantes and trusted service providers.

Target Market

A target market is a particular group of people where they want to sell its

products or services to and includes a targeted group of customers for whom they imply

its marketing services. Identifying the target market is an essential tool in developing a

marketing plan.

In this study the researchers are focused specifically in male student’s

enrolled Holy Cross of Davao College and the people currently residing near the

establishment ages from 16 years old and above.

Area Coverage

The proximity of the business is near the Holy Cross of Davao College, Mcdo

Sta. Ana, Sta. Ana Church, Gmall Bajada and San Pedro College of Davao because

this place is near the target consumer which is the students and other employees which
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they can easily access the barber shop. The respondents of the study are the students

of Holy Cross of Davao College.

Consumer/Customer

In determining the quality and efficiency it must explore perspective by which

customer evaluates what are the offered service available effectively be done by a

survey. Using a factor analysis, customer evaluation factor for services are examined

among categories like willingness, affordability and demand. To protect the reliability

and credibility of data, information should be gathered using accepted data collection

techniques. It may be beneficial to conduct an assessment to further understand what

service rendered by a barbershop business are and how much is the potential customer

willing to avail the services offered for them. The researcher will decide who will be

surveyed, determine how will the data be collected, sources of the data, the duration of

the data collected and among other questions.

Demand and Supply Analysis

Demand and Supply Analysis is the study of how buyers and sellers interact to

determine transaction prices and quantities. It is perhaps one of the most fundamental

concepts of economics and it is the backbone of a market economy. Demand is the

willingness and ability of consumers to purchase a given amount of a good or service at

a given price. Supply is the willingness of sellers to offer a given quantity of good or

service for a given price.

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Total Potential Demand

In determining the Potential Demand, the researchers prepared and conducted

survey questionnaires to their Target Market.

Table 1. Total Potential Demand

No. of
Target Population Total Respondents Percentage Potential
Market Respondents who said Market
YES
HCDC 2000 150 138/150 92% 1840

Walk-ins 85 50 47/50 94% 80

TOTAL 2085 200 185/200 1920 x 50%

=960 persons
per month

Among the prospective markets, there are approximately 2000 male students of

HCDC and 85 Walk-ins. In determining the number of demands in our target market, the

proponents of the business conducted a survey to have reliable information that

needed. This survey used by the proponents as a basis in determining the demand. The

business surveyed the students from Holy Cross of Davao College, Inc. (HCDC) with a

total of 200 respondents. Out of 200 respondents, 185 respondents will go to avail our

goods. The HCDC male students has a population of 2000 and 92% of it will be our

potential customer while the Walk-ins has a population of 85 and 94% of it will be our

potential customers.
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Table 2. Total Potential Demand of Haircut.

Potential Total
Potential Times of Number of persons % out Market times Demand
Market availing who wants to avail of % out of 185 Per
the service our service 185 times Month
in a month Frequency of
availing
1 43/185 23.24% 960 x .23 x 1 220.8
2 139/185 75.14% 960 x .75 x 2 1440
960 3 3/185 1.62% 960 x .0162 x 3 46.66
Total 100% 1,707.46

Table 2 shows the monthly projected demand of haircut by the customers. The

researchers conducted survey to the students based from the survey; there are 185 out

of 200 people who said that they want to avail the product. There are 23.24% of the

projected customers who can avail the service once a month, and 75.14% of the

customers that can avail twice resulting to 1,707 projected customers can avail per

month.
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Table 3. Total Potential Demand of Shave.

Potential Total
Potential Times of Number of persons % out Market times Demand
Market availing who wants to avail of % out of 185 Per
the service our service 185 times Month
Frequency of
availing
1 33/185 17.84% 960 x .18 x 1 172.8
2 52/185 28.11% 960x .28 x 2 537.6
960 3 100/185 54.05% 960 x .54 x 3 1,555.2
Total 100% 2,265.6

Table 3 shows the monthly projected customers of Shave. The researchers

conducted survey to the students; there are 185 out of 200 people who said that they

want to avail the product. There are 17.84% of the projected customers who can avail

the service once a month and 28.11 % of the customers that can avail twice and the

customers that can avail haircut thrice a month are 54.05 % resulting to 2,266 projected

customers can avail per month.

After gathering for target market, the business also examines the competitor

supplies.
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Present Supplier/ Competition

Table 4. Haircut service in Present Supplier/ Competition

COMPETITOR No. of Haircut from

competitors every month
Competitor A 310
Competitor B 280

Competitor C 240

Total 830

The location of the business has three competitors. Where competitor A

generates 310 haircuts per month. Competitor B generates 280 haircuts per month

while Competitor C generates 240 haircuts per month.

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Table 5. Shave Service in Present Supplier/ Competition

COMPETITOR No. of Shave from competitors every month

Competitor A 306
Competitor B 325

Competitor C 100

Total 731

Competitor A generates 306 shave per month. Competitor B produced 325 shave

per month. Competitor C generates 100 shave per month.

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Table 6. Computation of GAP Analysis

Services Demand Supply GAP

Haircut 1707.46 830 877.46

Shave 2265.6 731 1534.6
Total 3,973 1561 2,412

Based on Table 2, 3, 4 and 5 Kingsmen Cuts & Shave has 877 haircuts and

1,535 shaves from their potential customers.

Competitor Analysis

The Kingsmen Cuts & Shave has to study the SWOT Analysis to be able to

know the strengths and weaknesses of the competitors. This will help them to create an

effective and efficient planning to have a successful and profitable business. The

Kingsmen Cuts & Shave must know how to make strategies and know how to react of

the possible competitors to be able to survive and maintain the business in the mere

future.
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Pricing Structure

Table 7. Pricing Structure

Name of Business Services Prices

Kingsmen Cuts & Shave Haircut Php70
Shave Php30
Haircut Php50
Competitor A Shave Php20
Competitor B Haircut Php150
Shave Php50
Competitor C Haircut Php100

The researchers have carefully examined the pricing structure that the Kingsmen

Cuts & Shave will be implementing. The prices above are mostly based and compared

from their competitors’ pricing structure to make sure that it will be convenient and is

enough to cover the cost of services rendered and guarantees good return in the future.
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Projected Sales

This area defines the amount of revenue the company expects to earn at some

point in the future. It is a prediction that is synonymous with a sales forecast. It helps

determine the health of the company and whether sales will trend upward or downward.

Table 8. Computing Projected Sales Monthly

Services Prices of Services GAP Total

Haircut 70.00 877.46 P 61,422.2

Shave 30.00 1534.6 46,038

Total Projected Monthly Sales P 107,460.20

Table 8 shows the total projected monthly sales. The proposed price structure of

Kingsmen Cuts & Shave services is multiplied by the GAP. To get the annual sales,

monthly sales is multiplied by 12 months which will come up to the total of

P1,289,522.40

Marketing Program/Strategies

Practices of Competitors

Competition exists in every successful market, and you must be able to employ

the strongest competition strategies to make the most of your business. Competitors

practice different kinds of marketing techniques like online marketing, direct marketing,

and advertising in order to catch the attention of the customers. Some competitors
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implement pricing strategies. Offering special promos and discounts are most likely. It is

vital to set your prices at a level that ensures your business remains profitable yet

prevents the customers from looking elsewhere. Making your business look more

modern and inviting also catches the eyes of the customers. A good sales team and a

solid marketing plan are also the strategies that the competitor has. Advertisement in

niche print media has never gone out of style. Many competitors are still using print

media advertisement because of the fact that it is affordable and people who read

newspaper can see the write ups about the services. Marketing strategies are very

important because it provides an edge over its competitors.

Own Marketing Program/Strategies

Business competition can be fierce, especially in markets with aggressive

competitors. In order to build competitive advantage, the researchers implement these

marketing strategies for their business. First, knowing the competition, finding out who

their competitors are and their customers because customer expectations can change

dramatically. Find out what the customers truly desire. Next is on how to promote the

services to the customers. It should be unique that can tap into customers want.

Stepping up marketing by advertising in social media can get more customers

specifically the young ones who are easily get attracted on what's trend in social media.

Another is by looking after the existing customers, improving customer service by being

more responsive to their needs and expectations. Consider giving little freebies such as

quick massage and a free shower. It’s easier to keep existing customers that to find new

ones. Lastly, being the best service provider. Skilled, motivated employees underpin

vibrant, growing businesses. Attracting employees’ means more than paying a

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competitive wage. People are often more impressed by a good working atmosphere,

and benefits such as flexible working and structured career development.

Marketing and Selling expenses

Table 9. Advertising Expenses

Quantity/ Unit Item Description Price Total

2pcs Tarpaulin (5 X 6 ft.)@12 350.00 700.00

2pcs. Balloons (20pcs./pack) 12 50.00 100.00

inches

2 reams Flyers (500pcs./ream) 250.00 500.00

1pc. Sound System 3000.00 1500.00

Total Expenses 2,800.00

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CHAPTER 2

Technical Aspect

This chapter discuss about the services and activities offered by the company. It

also states the equipment used in rendering services. Location includes lay out, location

map, raw materials and utilities. It also includes product specification, processing using

the flow chart, the necessary technical requirements, government’s requirements and

the product processes, the step and procedure the duration, the list of machinery, tools

and equipment enumerated with their corresponding cost, the service schedule, labor

requirements and the waste disposal system.

Technical Requirements

In entering this kind of business, it is important that this should be studied

thoroughly and equipped with the best practices in managing these sorts of services is

the first thing to do. A barber shop is a hair salon for men where they offer cutting,

trimming and shaving hair or beard. Kingsmen Cuts & Shave equipment is suitable for

the services that business will provide. Offering services that use high quality machines

just like a sterilizer to properly clean the tools of the barber shop in order to satisfy the

cleanliness that the customer wants.

The effectiveness of the machines and equipment’s makes the business run long

in maintaining the stability and quality of the services. Being knowledgeable, well trained

and a good attitude and most accommodating staffs that are ready to help and give their

best in assisting the customers will make the business grow.

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Government Requirements

In putting up a business, in order to be part of an orderly marketplace the

business must follow the regulation of the state and must comply the specific

requirements of business permits for the assurance of the business that they are really

legally operated and keep them away from being fined for doing business without

complying the federal licensing and regulations requirements.

Table 10. Government Requirements

BIR (Bureau of It assesses and collects taxes, penalties, fees and charges and other
Internal fines related therewith.
Revenue)

Is tasked to supervise all the corporate sector in the Philippines.

SEC Certificate
Mandated also to make policies regarding the securities market.
of Registration

Document that is issued to the person who wants to established or

Mayor’s Permit operates business or any activities within the city. It only be approved
after the payment of taxes and submission of requirements.

It provides retirement and health benefits to all paid up employees in the

SSS (Social
Philippines. Members of this agency can make salary and calamity loan.
Security
Employees will enjoy insurance benefits such as disability, sickness,
System)
maternity and other benefits.

It ensures the health of every Filipino through social health insurance

regardless of social status. Through Phil Health it benefits the members
Phil Health to reduce the expenses during confinement of selected health services.
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Service Operation Process

Step by Step Process

The Needed
The approach
START Assessment
(2-3 minutes)
(5 minutes)

Payment at Performing the

Other concerns
Cashier desired service
(2-3 minutes) (5 minutes)
(15 minutes)

Figure 1. Step by Step Process

In this figure, it shows the step by step procedure on giving service to customers.

The first step is the approach. Opening door, welcoming and do greetings to our dearest

customer is the first thing first that our employee should do. Secondly, is assessing the

desired haircut. Customer could choose either to our available album of different

haircuts or their personal desire whichever they are prefer with. This step determines

the desired haircut of our customers. Next is the execution of services. This time our

employees are ready to serve our customers for what they’ve desired haircut. Lastly is

fixing of concerns. If our customers have their further concerns about their haircut style

our employees are willing to fix it

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Duration per-step-per batch

The Kingsmen Cuts & Shave in performing the service it takes only to 15-20

minutes. It takes to1 minute in entertaining and welcoming the customer. In assessing

desired haircut, it takes to 2 minutes because we gave more time to our customer to

think or choose what their desired hairstyle would be. In executing our service, it takes

15 minutes but we really assure our customers that they would be comfortable while

performing haircut on them. Then the fixing concerns which takes only to 2 minutes

because we really make sure that our service would satisfies our customer. Lastly, the

receiving of payment from the customer.

Service Schedule

Table 11. Service Table

Business KINGSMEN CUTS & SHAVE

Opening time 9:00AM

Closing time 8:00PM

TUESDAY-SUNDAY

The table above shows the service schedule of the business. The business opens

at 9 o’clock in the morning considering that early in the morning there are lot of students

and workers who wants to have haircut and also in the afternoon. The Business opens

at 9 o’clock in the morning until 8 o’clock in the evening. The business opens 11 hours a

day and will be open from Tuesday to Sunday. This service schedule helps the

customer to know the daily time schedule of the business.

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Labor Requirement

In this service, it consists of laborers who make the business run. They are very

important in this kind of business because through them they help to give the best

quality of service that the customers want.

Table 12. Labor Requirement

Barber An employee whose skill specializes in cutting, trimming and shaving hair and

especially for men.

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Equipment Requirement

In performing the service, it requires equipment to start performing and this is the basic

equipment’s that the barber shop needs.

Table 13. Equipment Requirement

Particulars Unit Unit Cost Total Cost

Barber's Chair 5 ₱8,000.00 ₱40,000.00

Wall Mirror 5 ₱2,500.00 ₱12,500.00

Hair Dryer 2 ₱799.00 ₱1,598.00

Straight Razor 5 ₱249.00 ₱1,245.00

Scissors (Set) 3 ₱200.00 ₱600.00

Shaver/Electric Clipper 5 ₱1,300.00 ₱6,500.00

Hair Comb (Set) 2 ₱250.00 ₱500.00

Barber's Cape 5 ₱196.00 ₱980.00

Sterilizer 1 ₱2,464.00 ₱2,464.00

Nose Trimmer 1 ₱2,299.00 ₱2,299.00

Sofa
1 ₱9,900.00 ₱9,900.00
TOTAL ₱78,586.00
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Kingsmen
Cuts & Shave

Figure 2. Shop Location

Kingsmen Cuts & Shave is located along 14-B Sta. Ana Ave., Poblacion District,

Davao City in front of the school of Holy Cross of Davao College. This location was

chosen because of its proximity it is near the schools, restaurants, mall and even the

hospital. Accessible to the public it is easy to find out the location for those people who

want to visit the barbershop. The business guaranteed for those students who wants to

make haircut can afford to its price.

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ENTRANCE &
SHOWER COMFORT
EXIT FRONT DESK
STORAGE ROOM
AREA

5 METERS

WAITIN
G AREA

MIRROR

9 METERS

Figure 3. Shop Layout

The illustration of Kingsmen Cuts & Shave floor area is about 5 meters by 9

meters or 45 square feet. The floor plan contains figures explained by the legend below

the figure. Business owners need to consider many operational factors when building a

facility for maximum layout effectiveness. In the store layout above, it is simple yet it

makes the customers feel comfortable because of the big spaces in the store.

Waste Disposal System

Human hair is considered a waste material in most parts of the world specifically

in the barber shop business. In order to eliminate waste, after cutting the barber will

gather all the waste hair and put into different garbage bin for different purpose such as;
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Hair can be sold to people who create wigs or hair extensions. There is even an online

calculator to determine the value of the hair. Apparently, hair is a good animal repellent

so some gardeners will gladly take it. Hair is an organic material that can be composted.

It will probably slow down composting if added in a large amount, so you need to spread

out hair over the compost heap, It counts as nitrogen source that can be used as a soil

nutrient. Having a clean environment creates a good impression to clients, increase the

comfort of both employees and visitors and make the shop safer.

Quality Control System

“Here at Kingsmen Cuts & Shave, to please our clients, explore new technology,

have fun, and be the very best at work we do, through continual improvement”. In a

barber shop business quality control is very important because it focused on the

meeting the customer’s requirement and enhancing their satisfaction. There should be a

specific standard of services that a company should have. The employees should be

well known to the job that they are doing to properly execute their task. To avoid

repetition of work, the employees should ask the customers what would be the service

that they actually want. Whether good or bad the response of the customers towards

the services that the business has offered it is still very important because with that the

company will execute more effort in making their quality control better.

When it comes to sanitation and cleanliness the employee’s conducts a general

cleaning every month to ensure and maintain a clean environment of the business.
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To ensure the safety of the customer’s the business has installed a CCTV

camera to record all transactions for future reference of not only the company but also

for the customers.

Chapter 3

Organization and Management Aspect

Legal Form of Business

Entering business is risky. One of the most important is choosing the right legal

form of business. When deciding how to structure the business, it’s important to have

an idea of where it’s going in the long haul so your chosen business structure doesn’t

impede growth later. Changing structure along the way can be a costly and time-

consuming matter. We chose business partnership to double our resources and our

ability to reach customers and as partners, we share in the profits and risks of the

business. It offers the advantage of allowing us to draw on the resources and expertise

of the co-partners. We have partners to share responsibilities and lighten the

workload. Because the owners are usually the managers, the business is fairly

easy to manage, and decisions can be made quickly without a lot of bureaucracy.
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Organizational Structure

Organizational Chart

OWNER

MANAGER
HAIRSTYLIST
CASHIER TECHNICIAN

Figure 4. Organizational Chart

The study came up to this type of business because barber shop is the essential

need of every man especially to the students, employees and other residences nearby

the location. Having a shop specifically barber shop needs an employee. So, the owner

needs to hire an assistant to manage and to operate the barber shop. The owner

resides at the top of the organizational chart. The owners first hire an operations

manager to help the owner to manage and operate the barber shop well. Then they hire

a hairstylist to do the most important task in the barber shop. They are the ones who

styles, groom, shaves and other services offered in the Kingsmen Cuts & Shave. They

hire a technician for maintaining and checking the shop equipment and repairing or

fixing the equipment if necessary. Lastly, they hire a cashier to collect payments and

ensuring that the payments are correct and to assist customers by explaining and
answering their questions.
Qualifications of Officers
Table 14. Qualification of Officers
Position Qualification
-Financial management literate
- Has a good communication, can
Manager handle the costumer and staff
well.
-Male of Female 18 to 25 years’
old
-At least a graduate of 4 years
business course and is competent
- Has customer service or Cashier -Accepting payments, ensuring
Experience
-Ability to handle transaction
accurately and responsibly.
-High level of energy with strong
Cashier customer service skills.
-Basic math and computer
literacy.
-Attention to detail.
- Helpful, courteous approach to
resolving complaints.
-Has good oral and written
communication skills
--Preferably has a good
managerial skills
-Honest and hardworking
-Provides barbering services, such
Barber as cutting, trimming, shampooing,
Hair and styling hair, trimming beards, -Cut and trim hair according to
Stylists or giving shaves.
25
Responsibility Salary
-Can run the business from
hiring staff to arranging
Php 14, 196/
financing.
monthly
-Reviewing sales reports and
financials
-Welcoming customers,
answering their questions,
providing advice or
recommendation.
all prices are accurate to the
given services.
-Assist in keeping the working
area clean, tidy and hygienic at
all the times as the business
Php 9,906/
operates
monthly
-Always adheres to the
business policies and guidelines
and business vision and
mission.
-Balancing the cash register and
generating reports for credit and
debit sales.
-Following all store procedure
regarding coupons, gift cash or
purchase of specific service.
-performing pre-and post-hair
care activities
-Clean work stations and
sweep floors.
Php 11,700/
monthly
clients’ instruction
-Clean and sterilize scissors,
comb, clippers and other
instrument.
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Office Equipment

Table 15. Office Equipment

Office Equipment Quantity Unit Cost Total

Air- conditioning unit 1 13,499.00 13,499.00

Computer Set 1 9860.00 9860.00
CCTV 3 5,400.00 16,200.00
TOTAL Php39,559.00
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General Policies

Table 16. General Policies

Appearance and - The business will require proper grooming

Contract
Tardiness - For every 15 minutes late, there is a 1hour
deduction for employee’s salary

Absences - For every 3 consecutive absences with failure to

give notice will be subjected to proper disciplinary action.

Benefits, Wages and - They will be receiving 13 month pay and other
Incentives benefits like SSS, Philhealth, Pag-ibig, etc.
 28

GANTT CHART OF ACTIVITIES

Table 17. Gantt chart Activities

Months

1 2 3 4 5 6 7 8
Activities

Preparation of the Feasibility Study

Explore Area/ Location

Business License Process

Construct Building

Installation of Electricity and Water

Supply

Purchase Furniture and other

Equipment

Placing and Arranging the Tables

and Computer Unit

Hire Employees

Train Employees As a
busines
Inaugurate of Business s
beginne
r, the
Men’s
Barberia
has to
study
 29

These are the particular activities in our business which is to search the

area/location first within two months at the same time we followed up the requirements

complying the business permits needed in our business and it took 3 months to

complete those requirements. After we found the perfect location and finished the legal

requirements for our business, we started to re-construct the building and it took 3

months to finish it. During the last months while the building is reconstructing, we

started hiring employees to have their own positions once the building is done.
 30

Chapter 4

Financial Aspects

This chapter shows how much is needed in start-up capital, source of financing,

financial assumptions of the business, projected financial statements, total project cost

and other financial considerations. It shows if the business is profitable or not. This

would also help the researchers to know the flow of the financial transactions of the

business within five (5) years.

Total Project Cost

Table 18. Total Projected Cost

Projected Cost Cost (in peso) Total (in peso)

Capital Expenditures:
Machines and Equipment 95,745
Furniture and Fixtures 22,400 118,145

Operating Expenditures:
Registration, Permits & Licenses Fees 15,000
Utilities Expenses 10,000
Advertising Expense 2,800
Rental Expenses 30,000
Salaries and Wages 70,902
128,702
Total Projected Cost Php246,847
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Source of Financing

The Kingsmen Cuts & Shave source of financing will be coming from the

investment of the partners. The partners will invest PHP 200,000 each partner for the

total of PHP 1,000,000.

Financial Assumptions

Kingsmen Cuts & Shave financial plans depend on assumptions which are based

annually. As a newbie in the business world, for our first and second year of operation

we are still learning the process but with the help of our strategies.

Cost fluctuates and never been constant. The business projected sales are

computed in a year, it assumed that revenue will increase 10% each year. All sales

transactions shall be on a cash basis and fixed assets will be depreciated using straight-

line method. Utilities expense is paid in cash. The utilities expense is assumed to

increase 3% in year 2 to year 5.

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Table 19: Projected Financial Position

KINGSMEN CUTS & SHAVE

Projected financial position for the first 5 years
Year 1 Year 2 Year 3 Year 4 Year 5
ASSETS
Current Assets
Cash 1,055,273.40 1,369,044.04 1,820,954.14 2,425,077.21 3,196,901.89

Advance Rental 10,000.00 10,000.00 10,000.00 10,000.00 10,000.00

Total Current Assets 1,065,273.40 1,379,044.04 1,830,954.14 2,435,077.21 3,206,901.89

Noncurrent Assets

Property and Equipment 94,516.00 70,887.00 47,258.00 23,629.00 -

Security Deposit 5,000.00 5,000.00 5,000.00 5,000.00 5,000.00

Total Noncurrent Assets 99,516.00 75,887.00 52,258.00 28,629.00 5,000.00

TOTAL ASSETS 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21 3,211,901.89

LIABILITIES
Current Liabilities
Provision for income tax 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70
Total Current Liabilities 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70

TOTAL LIABILITIES 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70

PARTNERS EQUITY

Partners Equity beginning 1,000,000.00 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21

Net Income 115,352.58 203,099.15 299,796.77 406,345.85 523,736.98

Partners Equity Ending 1,115,352.58 1,367,888.55 1,754,727.81 2,289,557.99 2,987,443.19

TOTAL LIABILITIES &
PARTNERS EQUITY 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21 3,211,901.89

Difference - - - - -

The table above shows the comparative statement of financial position of the first

five years of the operation of Kingsmen Cuts & Shave. This statement is used by users
 33

to evaluate factors such as liquidity, solvency and the need of the entity for additional

financing.

Table 20: Projected of Financial Performance

KINGSMEN CUTS & SHAVE

Projected income statement for the first 5 years
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 1,289,522.40 1,418,474.64 1,560,322.10 1,716,354.31 1,887,989.74
Operating
Expenses:

Depreciation 23,629.00 23,629.00 23,629.00 23,629.00 23,629.00

Rental 120,000.00 120,000.00 120,000.00 120,000.00 120,000.00

Utilities 120,000.00 123,600.00 127,308.00 131,127.24 135,061.06

Advertisement 5,600.00 5,600.00 5,600.00 5,600.00 5,600.00

Salaries & Wages 855,504.00 855,504.00 855,504.00 855,504.00 855,504.00

Total operating
expense 1,124,733.00 1,128,333.00 1,132,041.00 1,135,860.24 1,139,794.06

Net Income
Before Tax 164,789.40 290,141.64 428,281.10 580,494.07 748,195.68

Income Tax 30% 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70

Net Income After
Tax 115,352.58 203,099.15 299,796.77 406,345.85 523,736.98

The projected income statement allows the Kingsmen Cuts & Shave to know if

the business is earning profit or accumulating losses the projected income statement

and it shows that there is an increase of 10% in the revenue each year and the increase

of 3% of the utilities. It only states that starting up a business cannot guarantee an entity

to accumulate much income.

 34

Table 21: Projected Cash Flows

KINGSMEN CUTS & SHAVE

Projected cash flow for the first 5 years

Year 1 Year 2 Year 3 Year 4 Year 5

Operating Activities:

Net income 115,352.58 203,099.15 299,796.77 406,345.85 523,736.98

Adjustment for
depreciation 23,629.00 23,629.00 23,629.00 23,629.00 23,629.00
(Increase)decrease in -
advance rental 10,000.00
(Increase)decrease -
security deposit 5,000.00
Increase(decrease) in
49,436.82 87,042.49 128,484.33 174,148.22 224,458.70
provision of income tax
Cash flow from operating
activities 173,418.40 313,770.64 451,910.10 604,123.07 771,824.68

Investing Acitivities:
Purchase fix assets -118,145
Cash flow from investing
-118,145
activities

Financing Activities:

Partners contribution 1,000,000.00

Cash flow from financing
activities 1,000,000.00

Net increase in cash 1,055,273.40 313,770.64 451,910.10 604,123.07 771,824.68

 35

Beg. Balance 1,055,273.40 1,369,044.04 1,820,954.14 2,425,077.21

End. Balance 1,055,273.40 1,369,044.04 1,820,954.14 2,425,077.21 3,196,901.89

Cash flow statement provides necessary information as to how liquid is to meet

its currently maturing obligation or its capabilities to fund its daily operation and daily

expenses. The depreciation expense has to be added back for it is an expense that

don’t actually involve cash outflow; therefore, the comprehensive income has to be

adjusted and reported in the cash flow statement as purely in cash basis.

Financial Analysis

Financial analysis is the examination of a business from a variety of perspectives

in order to fully understand the greater financial situation and determine how best to

strengthen the business. A financial analysis looks at many aspects of a business from

its profitability and stability to its solvency and liquidity.

Table 22: Payback Period

Payback Period

Investment 1,000,000

Cash Inflow Year 1 1,055,273.40

Payback Period 0.95

1.02 or 1 year and 2 months

The payback period will show the capability of the business to return its

investment. This shows that it will take 1 year and 2months operation to recover the

investment of the business and after it is expected to continue yearly.

 36

Profitability Ratio

A profitability ratio is a measure of profitability, which is a way to measure a

company’s performance. Profitability is simply the capacity to make a profit, and a profit

is what is left over from income earned after you have deducted all costs and expenses

related to earning the income. The formula you are about to learn can be used to judge

a company’s performance and to its performance against other similarity situated

companies

Table 23: Return of Investment

Return on Investment

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income 115,352.58 203,099.15 299,796.77 406,345.85 523,736.98

Total

Assets 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21 3,211,901.89

10% 14% 16% 16% 16%

Kingsmen Cuts & Shave generates 7% return of assets in year1. In year 2, it

increases by 5%. It increases by 3% from year 3 percentage of 12% to 15% in the year

4 it increases it by 1% in the year 5.

 37

Table 24: Gross Profit Ratio

Gross Profit Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income Before

Tax 164,789.40 290,141.64 428,281.10 580,494.07 748,195.68

Revenue 1,289,522.40 1,418,474.64 1,560,322.10 1,716,354.31 1,887,989.74

13% 20% 27% 34% 40%

The gross profit ratio shows that the business is operating in a cost-effective

manner, before selling and administrative expenses. It only makes sense that higher

ratios are more favorable. This is the pure profit from the gross revenues that can go to

paying operating expenses. With a percentage of 10% in year 1, this indicates that we

are stable for year 2 up to year 5 in providing our services to customers. With a high

ratio, it illustrates high percentage mark-up of the business to produce the service.

Table 25: Net Income to Sales Ratio

Net Income on Sales

Year 1 Year 2 Year 3 Year 4 Year 5

Net Income After

Tax 115,352.58 203,099.15 299,796.77 406,345.85 523,736.98

 38

Sales 1,289,522.40 1,418,474.64 1,560,322.10 1,716,354.31 1,887,989.74

9% 14% 19% 24% 28%

One of the best measures of the overall results of a firm, the ratio indicates that

performance over time is excellent for this kind of industry. A high gross profit to cover

operating expenses caused a high income which partly returned our investment. The

fact that the income is high, the business is capable of maintaining in the market despite

many factors such as competition.

Liquidity Ratio

Liquidity Ratio refers to the ability of the business to pay its obligations in cash as

they mature. The focal point of this liquidity analysis is cash. It includes the ability of the

management to convert its current assets into cash in a quick stable and regular

manner.

Table 26: Current Ratio and Quick Ratio

Current Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Current Assets 1,065,273.40 1,379,044.04 1,830,954.14 2,435,077.21 3,206,901.89

Current

Liabilities 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70

21.55 15.84 14.25 13.98 14.29

 39

The ratios indicate the enough convertible assets to cash quickly. The five-year

quick ratios are enough to recover from the cost incurred during the implementation of

the business. The current assets are much larger than the current liability. This indicates

that the current asset can meet the short-term obligations of the business. As shown

above the increasing ratios show that the assets allocated well and ensuring that they

manage the business well.

Solvency Ratio

Solvency ratio is one of the various ratios used to measure the ability of a

company to meet its long-term debts. Moreover, the solvency ratio quantifies the size of

company’s after-tax income, not counting non cash depreciation expense, as contrasted

to the total debt obligations of the firm. Also, it provides an assessment of the likelihood

of a company to continue congregating its debt obligation.

Table 27: Debt Total Asset Ratio

Debt to Total Asset Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Total

Liabilities 49,436.82 87,042.49 128,484.33 174,148.22 224,458.70

Total Assets 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21 3,211,901.89

4% 6% 7% 7% 7%
 40

Since there are no other liabilities aside from legal obligation and other

expenses, the lower ratio indicates that the business has insignificant obligation to the

total assets it has. Investments are funded through the capital of the partners. This

means that most of assets are finance by the owners, and this means that the owners

do not rely on its outside financing. By this, the investors and creditors would not be

hesitant to borrow incurred assets to meets its maturing obligations.

Table 28: Equity Total Asset Ratio

Equity Total Asset Ratio

Year 1 Year 2 Year 3 Year 4 Year 5

Total Partners

Equity 1,000,000.00 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21

Total Assets 1,164,789.40 1,454,931.04 1,883,212.14 2,463,706.21 3,211,901.89

86% 80% 77% 76% 77%

The lower ratio indicates that the business is funded by the partnership in the

major operations. Acquisitions of assets are not from the debt it is either funded by the

partners or through the sales accumulated by the Kingsmen Cuts & Shave. The

business has enough cash to meet its current obligation and successful enough to pay

a return on their investment.

 41

Chapter 5

Socio-economic Aspect

This chapter discusses the significance of the study of the study to the

government and to the society. This business is just not for profit purpose but also it

improves the people’s welfare.

Customer

The proponents believe that the customers will benefit from this business is the

satisfaction to the services that the barber shop offered. In pampering oneself it always

starts from the head to toe, cutting of hair is the first step to pamper the customers. With

the cheap price that the business is offering customers can benefit well.

Community

A barber shop plays an important role in the community because they are the

ones who grooms the hair of every men specially students who have a required haircut

in their school. Students will benefit more since the Kingsmen Cuts & Shave is located

near the school. The goal of this study is to give every man a hairstyle they want and to

provide an excellent service and an affordable price a barber shop can provide.

Employment

Making a change in the lives of the people is one of the important aspects for

being successful in the business industry. It is not just measured on how much you earn

in your business but also by making a difference in people's life. It is a great opportunity

to build up a business that can benefit to the workers by giving their best shot to satisfy
 42

the customer and in return the business will give them the appropriate amount of salary

with favorable benefits and bonuses to sustain the needs of their families.

Environment

Having a clean and effective environment is a fundamental aspect of having

good business operations. Barbers usually work in pleasant surroundings with a good

lighting. Physical stamina is important, because they are on their feet for most of their

shift. Prolonged exposure to some chemicals may cause skin irritation, so they wear

protective clothing, such as disposable gloves and apron. Hair waste must be kept in a

trash bins to prevent environmental problems and some skin diseases. Hair waste may

use as a fertilizer to reduce pollution.

Government

All businesses whether it is micro or macro enterprises have the responsibility in

acquiring and filling the specific requirements in putting up business in order for them to

legally operate their businesses to the public. One of those is Filing or Paying Taxes.

The primarily role of the government is to collect taxes for those businesses that are

currently operating. Taxes paid by the business will help the growth of the country’s

economy. That would include our business the Kingsmen Cuts & Shave. The

government collects taxes from us in order to give services to the people living in the

country. Without taxes paid by the enterprises or individual government could not

continue in serving the public such as constructing the roads and railways, public

schools and hospitals and etc.

 43

APPENDIX A

Dear Respondents,

We, the Bachelor of Science in Accounting Technology students from Holy Cross of
Davao College are currently conducting a Feasibility Study as a pre-requisite for undergrad
subjects. We are thankful for giving us a spare of your time. We are also hoping that you will
give your full participation and honest answers with this survey. God bless you always!

Name (Optional):________________ Age:___________

Status:_________________________Gender:________

1. Age Range

 16-24

 25-35

 36-45

 55 or older

2. If a barbershop becomes operational, would you go?

____ Yes ____ No

3. Expected price for a quality haircut.

 P50-P70

 P70-P90

 P90-P120

 P120-P150

4. What are you consideration in choosing a barbershop?

 Price

 Professionalism of employee

 Variety of product offered

 44

 Location

 Others (pls. specify) _______________________

5. What time do you usually get a haircut?

 Morning (7am-11am)

 Mid-day (11am-3pm)

 Afternoon (3pm-6pm)

 Night (6pm-8pm)

6. How often do you get a haircut?

 Once a month

 Twice a month

 Others (pls. specify) _______________________

7. How often do you get a shave?

 Once a month

 Twice a month

 Thrice a month

 Others (pls. specify) _______________________

8. How much time are you willing to wait to get a haircut?

 5-10 minutes

 15-20 minutes

 20-25 minutes

 25-30 minutes
 45

APPENDIX B

SCHEDULES

SCHEDULE 1: Machineries and Equipment

Particulars Unit Unit Cost Total Cost

Barber's Chair 5 ₱8,000.00 ₱40,000.00

Wall Mirror 5 ₱2,500.00 ₱12,500.00

Hair Dryer 2 ₱799.00 ₱1,598.00

Straight Razor 5 ₱249.00 ₱1,245.00

Scissors (Set) 3 ₱200.00 ₱600.00

Shaver/Electric Clipper 5 ₱1,300.00 ₱6,500.00

Hair Comb (Set) 2 ₱250.00 ₱500.00

Barber's Cape 5 ₱196.00 ₱980.00

Sterilizer 1 ₱2,464.00 ₱2,464.00

Nose Trimmer 1 ₱2,299.00 ₱2,299.00

Sofa
1 ₱9,900.00 ₱9,900.00
TOTAL ₱78,586.00
 46

SCHEDULE 2: Pre- Operating Expense

Particulars Total Cost

Location Survey 6,000

Registration, Permits and Licenses Fees 15,000

Manpower: Hiring/Training 4,000

Total 25,000

SCHEDULE 3: Advertising Expenses

Quantity/ Unit Item Description Price Total

2pcs Tarpaulin (5 X 6 ft.)@12 350.00 700.00
2pcs. Balloons (20pcs./pack) 12 50.00 100.00
inches
2 reams Flyers (500pcs./ream) 250.00 500.00
1pc. Sound System 3600.00 1,800.00
Total Expenses 3,100.00

Schedule 4: Salaries and Wages

Position No. of Staff Monthly Annually

Cashier 1 9,906 118,872

Manager 1 14,196 170,352

Barber Hair Stylist 4 11,700 561,600

Total 71,292 850,824

 47

CURRICULUM VITAE

Name: Mark Lloyd Concepcion

Age: 22 years old

Birthdate: October 27, 1996

Address: 444 Dalanghita Street, Sto.Dominggo II, Pampanga, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: marklloydconcepcion@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Ave., Poblacion, Davao City

SECONDARY Holy Cross College of Sasa

Km.9,Sasa, Davao City

PRIMARY Doña Pilar Learning Center Foundation Inc.

Dona Pilar Village, Sasa, Davao City

 48

CURRICULUM VITAE

Name: Andrea Kylie R. Saut

Age: 20 years old

Birthdate: January 7, 1999

Address: B22 L3, Olive Street, Dacoville Subdivision,

Dumoy, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: kylieandrea7@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Ave., Poblacion, Davao City

SECONDARY General Baptist College

Libby Road, Puan, Davao City

PRIMARY San Lorenzo Elementary School

San Lorenzo Village, Puan, Davao City

 49

CURRICULUM VITAE

Name: Jenny Mae S. Pardilla

Age: 20 years old

Birthdate: June 28, 1999

Address: Purok 7 Blk.3 Panacan Relocation, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: jennymaepardillax@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Ave., Poblacion, Davao City

SECONDARY Davao City National High School

F. Torres St. Davao City

PRIMARY J.Cruz Sr. Elementary School

Panacan Relocation, Davao City

 50

CURRICULUM VITAE

Name: Airen Jean H.Piscos

Age: 20 years old

Birthdate: January 7, 1999

Address: L8 B8 Illumina Estate P2, Communal, Buhangin, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address: airenjean@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Ave., Poblacion, Davao City

SECONDARY North Davao Colleges

San Francisco, Panabo City

PRIMARY Gredu Elementary School

Brgy. Gredu, Panabo City

 51

CURRICULUM VITAE

Name: Lyxa Beatriz C. Aragon

Age: 24 years old

Birthdate: February 28, 1995

Address: 142 Esperanza St. Hacienda Heights, Old

Airport,Sasa, Davao City

Civil Status: Single

Citizenship: Filipino

Religion: Roman Catholic

Email Address:aragon.lyxa@gmail.com

EDUCATIONAL BACKGROUND

TERTIARY Holy Cross of Davao College

Sta. Ana Ave., Poblacion, Davao City

SECONDARY Brokenshire Science High School

F. Torres St. Davao City

PRIMARY Little Lamb School House

Bacaca Road, Davao Cit